Cheong Wa Dae deflects calls for Kim Yong-beom to resign, vows market action

Cheong Wa Dae said Thursday that rather than addressing calls for presidential policy chief Kim Yong-beom to step down over the single-stock leveraged ETF controversy, "the more important thing for us right now is to closely monitor the market and work on countermeasures."

Presidential communications chief Seong Gi-hong made the remarks in an interview with CBS Radio's Park Seong-tae News Show that day. He said "not only the policy chief but all Cheong Wa Dae officials are carefully reviewing every aspect of this, and are looking very closely at what the causes are and how to put countermeasures in place." The comments were widely read as signaling that the administration believes Kim should focus on finding solutions rather than resign.

Seong added that Cheong Wa Dae recognizes single-stock leveraged ETFs as a factor that has amplified stock market volatility. "We are carefully reviewing this matter, and it is true that we are also considering additional measures, including follow-up management if necessary," he said.

Seong also addressed remarks President Lee Jae Myung made during a Ministry of Justice briefing on Wednesday, in which Lee said he had not read the entire amendment to the Code of Criminal Procedure. Seong said the president "naturally has a thorough understanding of the overall intent and key contents of this revision to the Code of Criminal Procedure."

During the Wednesday briefing, President Lee had asked, "I have not read the revised Code of Criminal Procedure myself, but does it say that prosecutors are not allowed to conduct investigations?" Justice Minister Jeong Seong-ho replied that "there is no longer any legal basis for prosecutors to conduct investigations of any kind."

When critics questioned whether the president had failed to read a revision to the Code of Criminal Procedure that has drawn wide public attention, Seong rebuffed the characterization. He said the remark did not reflect ignorance of the law's intent, but came as Lee was explaining and asking questions about how the joint police-prosecutor investigative task force should be understood under the new framework.

Seong said the revision amounted to the first comprehensive overhaul of the country's criminal justice system in roughly 70 years. "What remains now is the challenge of whether the Public Prosecution Service, the Serious Crimes Investigation Agency and the police — all of which will operate under the revised law — can successfully lead the investigative system without causing harm to the public," he said.

He added that the president's question on Wednesday was specifically about the existing joint police-prosecutor investigative task force — namely, once the law takes effect, to what extent and in what capacity prosecutors may or may not be involved in investigations conducted by that body.

Seong said the president had been asking the two ministers — Yun Ho-jung and Jeong Seong-ho — about gaps or areas needing clarification as the landmark criminal procedure reform moves toward implementation. "I believe, and it is in practice understood, that the remarks came from a desire to ensure that none of this causes inconvenience in people's lives," he said.

Seong also laid out Cheong Wa Dae's position on the government's tax reform package announced Monday. Asked whether the aim of the real estate tax overhaul was market stabilization or taxing the wealthy, he said the goal was "to rationalize the real estate tax system in a direction that improves fair and equitable taxation."

"As the president has made clear on multiple occasions, the government does not intend to use real estate taxes to bring down home prices," Seong said. "I want to make it clear that this tax reform is not a short-term measure aimed at stabilizing the real estate market."

He said the core of the reform was to "protect owner-occupiers of a single home to the maximum extent possible, while gradually increasing the burden on homes above a certain value, non-owner-occupied properties and multi-home ownership." On housing supply, he said the government was "working on a range of measures, including expanding housing supply and rationalizing housing finance," and planned to release a comprehensive policy package as soon as possible.

On criticism that the tax reform package failed to address jeonse and monthly rent, Seong said it would be "structurally difficult" for higher property-holding taxes to be passed on entirely to renters. "The impact on the jeonse and monthly rental market needs to be considered comprehensively from the perspective of supply and demand, rather than being viewed purely as a tax issue," he said.

Seong said the government would continue to expand public rental housing supply to stabilize the jeonse and monthly rental market and ease the housing cost burden on young people and those without homes. "The various supply-side measures to be announced soon will address this, and the government is working on multiple fronts to find fundamental stability through expanding housing supply," he said.

On the supply push, Seong said the government was approaching the issue "with an extraordinary sense of urgency — I would call it a race against time." He said the president was personally overseeing the effort and directing relevant ministries to break from past practices and come up with bold solutions to secure housing supply.